R52 semi-annual investment portfolio

1:11:25Uh let's go ahead and time certain now.

1:11:27Okay.

1:11:28I'll just do very briefly.

1:11:29Very briefly, R fifty two. Um so as they are walking up, um this is the semi-annual investment portfolio. Um presentation we have Scott Stitcher with PFM Uh he's a he's a director with PFM and um PFM manages a portion of the investment for the county and then we also have the finance director from my office, Matt Lazar, and our office manages another portion and they will both present very quickly on each portion. How about that?

1:12:00Um let me ask this question, would you like a um a market update before they get into the presentation? Uh Um the you know investment market, financial market update. That's usually what they do. So I'll leave it to the board Mr. Chairman Metermine if you'd like that first.

1:12:16Yes. That'd

1:12:17be fine.

1:12:18Okay, then we'll go ahead and proceed. Thank you.

1:12:21All right, we'll do our best to keep this short. Good to see you, Mr. Chairman, Commissioner, Madam Clerk. Scott Stitcher with PFM Asset Management. Uh trying to be brief on the economy is pretty tricky, but I'll do my best here. We'll characterize the economy as uh Seeing moderating economic growth. Uh first quarter reading came in at 1.4%, the initial reading for 2Q at 2.8%. We've seen inflation continue to trend lower towards the

1:12:51Fed's target of two percent. It's very encouraging as well. The labor markets continue to be very strong. Although we did see the unemployment rate tick up during the quarter to four point one percent. Breaking a 28-month streak of being below 4%. And then more recently it ticked up to 4.3 percent. Uh The consumer continues to drive growth, which is good. The consumer makes up two thirds of growth in the U.S. economy. So an employed individual continues

1:13:21to have money in their pocket, Is able to spend. Although we are seeing some cracks, some slower spending. I think higher prices and falling consumer savings rates are starting to slow spending. But we're seeing growth nonetheless. I mentioned the labor market continuing to loosen a little bit. The Fed now is having to focus on their dual mandates, and that is full employment. Mm-hmm. as well as fighting inflation. I think people had forgotten that since for the the

1:13:51last two years the Fed has been hyper focused on fighting inflation and and raising interest rates. I say all this with um Uh good news for long-term fixed income investors as we s when we look at performance, we'll look at the income that's now being received in the our portfolio of uh Аз важі портфр инвест. That Matt is going to touch on here in a second. So let me let me stop there. It was a quarter in which in uh interest rates rose. Since

1:14:22that time, interest rates have fallen considerably, which should work in your favor. Uh when I'm visiting with you the next time, that falling interest rates are gonna equate to uh bond prices going up. So So that's a very abbreviated version of what's going on in the economy. Any questions, thoughts, concerns?

1:14:47See in there?

1:14:48Okay.

1:14:49Move forward. All right. Uh so to keep it brief, County has money, we're investing money, and you guys are seeing a return. Um

1:14:58Thank you.

1:15:01Sounds good. Right? That's what everyone likes to hear. So where we are at right now, the unrestricted portfolio, so that for the county which is not tied to debt covenants stands at about one point four billion dollars. We have that further broken out down into both these short and long term investments. So short term being anything less than ninety days, long term greater than ninety days. And so just to kind of keep pushing through here, what does that mean, Matt? Short-term investments, $363 million of the county's unrestricted

1:15:31portfolio is currently in the short-term investments, averaging about 36 days of maturity. Long-term investments sit just over $1 billion and we're at about 379 days of maturity. What does that mean? That means we are kind of tying into what Scott was just saying. The feds are confusing us all and they kind of scare us a little bit, but we are starting to see uh navigation from that short-term earnings to really pushing out longer out on the curve, and the county is set up to experience just that. So um that is the good news. What we

1:16:01want to also put put out there for you guys is in the last quarter for the quarter end of June 30th. The county uh saw realized earnings of nine point eight million dollars. Um which means year to date we're about $35 million. So we're projected to have a second consecutive year of being over the $40 million mark, which is amazing news considering a couple years prior we were barely getting to $10 million.

1:16:25Really on this slide, uh just to kind of not reiterate what you're already seeing, but I do want to point out the Florida POM term. That is the investments uh in which we invest X amount of dollars at X amount percent and we get that ex we're getting that guaranteed return. Um we're gonna expect another $1.4 million here through the next of the end of this fiscal year in maturities, and we're already looking at guaranteeing. the county twenty million dollars with what is maturing going through twenty twenty five, which the good news is not

1:16:55knowing what the market's gonna do, it gives us that little bit of buffer kind of as we go through. Any questions here? Yes. Yes. Okay.

1:17:04So looking at the unrestricted long-term investment statistics, I have two questions. One, um, I see this central bank. Where is and who is central bank?

1:17:15Central Bank is is a local bank uh over I believe they have a location in Lutz and Hillsboro, but it is the we have a certificate of deposit with them. Uh

1:17:24okay. Well I've I've never heard of them, but um Um and then I'm and then First National Bank of Pasco. Ye zero zero. Um what's going on there? That there were not yield at costs, expected

1:17:36Yeah, that would look strange, wouldn't it? Right. No. So it is we are earning uh about five percent return on that. That is a type on there. We did not uh give First National Bank of Pasco uh ten million dollars just to hold on to the

1:17:49Well that's good. But um something I wanna ask is and it never occurred to me until now, is that when we're investing in these banks with this amount of money, I'd like to know what they're doing. Back into the community as far as charitable participation. So if we're gonna participate with them. They need to be a little bit more than a little bit. you know, given back in the community. And that would be one of my um Um checks when I'm deciding which bank I'm gonna put my money in. So I'd love to know what they're

1:18:20doing, what their charitable giving to com Pasco County charities has been.

1:18:26Yes ma'am. And we do understand that, so when we do uh perform our due diligence, we do kind of sit down with all these banks and ask those types of questions. Okay. Well we'd like to see it,

1:18:35I think.

1:18:36Yes, ma'am.

1:18:36All

1:18:36right. Mr. Mariano?

1:18:38Uh Commissioner Starkey exactly what was gonna pull out that zero percent. So I'm glad you glad you mentioned it. But I will tell you I'm more concerned about rates and in and what we're gonna get back for the taxpayers to help to keep taxes down than I am with the where what they're gonna do with the let the business run. I don't want to control it. Okay.

1:18:54Yeah, but all things equal.

1:18:57Oh yeah. All right. And then this will be my last slide here, and then we'll see if there's anything else you guys want to discuss. But you'll also see this repeated in your board packet. We gave you the quarterly investment summary that the finance team produces for you every quarter. And what you're seeing here is the county as well within the restrictions placed by the investment policy. So the gray outline is the maximum limits, and the blue fill-in section is. Exactly where the percentages stood as of June 30th. So the finance team monitors

1:19:27the investment policy as well as Florida statute, and this is kind of where we currently sit. Um, you know, we usually see that local government investment pool and Florida prime number creep up during October through December as tax revenues come in, but that's where the finance team really kind of focuses to make sure we're not exceeding uh the allowable limits. any questions on that.

1:19:49Okay, thank you.

1:19:51Any nothing else? You guys are good? Yeah, this is the appreciated.

1:19:54Okay. Thank you. Good report. Thank

1:19:58you

1:19:58very much.